5 Reasons to ask your suppliers for proof of insurance
I had an email today from a client who had provided proof of their insurance to one of their clients and their client had commented that some of their suppliers had stated that they didn't have insurance. Could I offer any reasons why they should be insistent that their suppliers carried the right insurance?
Too right I could!
Heres five reasons for starters, there are probably many more
- Being able to demonstrate at least a basic level of insurance demonstrates that the supplier has had some thought as to the risk of running a business and has taken steps to protect themselves. Its a basic level of professionalism.
- If there is no insurance in place then should certain events occur, this would very likely lead to the insolvency of the supplier meaning that you would be left needing to source a new supplier
- If they are not taking insurance against certain statutory required risks (employers liability, for instance) then they are breaking the law and you should consider the ethics of dealing with such a supplier
- If they don’t take third party liability insurance (public liability, professional liability) then it could be you that suffers a loss if the supplier damages their equipment, or provides negligent advice to them. Having insurance gives a re-assurance that in these circumstances there will be a reliable pot of money to deal with your losses.
- Quite possibly, if you have a written contract with the supplier, then this will state that the supplier must take appropriate insurance cover. If they don’t then they would be in breach of the contract.
Always make sure you check that your suppliers have the right insurance in place and if they can't provide you evidence then consider the points above.
Speak to me if you have any questions on this.